In the 1940s, Baby Jane Hudson is a world-famous child star. Jane dominates her shy sister Blanche, who, as Jane's understudy and stunt double, longs to have an acting career separate from Jane. It is implied that Jane tends to become jealous when their father shows affection to Blanche. By the 1960s, Blanche has become a serious and celebrated actress, while Jane's career fades into obscurity after childhood. She appears in smaller roles in Blanche's films where her scenes usually get edited out. Blanche's career was cut short by a car accident that paralyzed her from the waist down, after which Jane was committed to a psychiatric hospital. The tabloids suggested that a jealous Jane had run down her more talented sister with the car and then gone insane with guilt. In the present day, the sisters live together in a crumbling Brentwood mansion, where a somewhat unstable Jane, who still dresses herself like a 10-year-old, tends the paraplegic Blanche. Blanche's films have recently become available on video and television, launching her into a modest comeback. Jane resents both her sister's enduring popularity and her own role as caretaker, and takes out her resentment on Blanche with vicious, childlike pranks such as putting worms in Blanche's food and cutting all of Blanche's hair. Jane also intercepts all mail addressed to her sister, including fan mail. She reminds Blanche that it was her success that helped her start her career by paying for everything, including her acting classes. Blanche and her physical therapist, Dominick, worry that Jane's old mental problems are returning, and that her pranks might turn violent if she finds out Blanche is selling the house. Hoping that she can also stage a comeback, Jane goes to a video store to see which of her old films are available. Billy Korn, the store's owner, recognizes her as Baby Jane, much to her delight. Believing that the Hudson sisters must be extremely wealthy, Billy recommends himself as her manager and promises to arrange a spot in a talent show for $1,000. Jane is thrilled by his attention and agrees. Back at home, Blanche makes her way to a telephone and tries to call for help from the sisters' psychiatrist, only to have Jane overhear the conversation and then physically attack her. As Jane impersonates her on the telephone talking to the doctor, Blanche realizes that her sister has become completely insane. She tries to escape, but Jane locks her in a room upstairs with no means of communication. After being starved for days, Blanche rummages through drawers for food and finds checks with her forged signature, rendering her unnecessary for Jane to access her money. Dominick arrives for his weekly appointment and has to force his way around Jane and into Blanche's room, where he finds her bound and gagged. Before he can help, Jane stabs Dominick to death with a pair of scissors and hides his body in the basement screening room, then leaves for the performance Billy has arranged for her. Jane arrives at the show, only to discover that the "talent show" is actually a drag revue and that Billy is dressed as Blanche for their duet. The audience ridicules Jane's appearance and performance, leading her to suffer a mental breakdown and run offstage. Still dressed as Blanche, Billy follows, arriving back at the mansion ahead of Jane. While searching the house for money, he finds Blanche, but leaves without helping her, instead going to Jane for his money. Jane, still in shock, mistakes him for an escaped Blanche and stabs him to death. Finally coming to her senses, Jane puts Blanche into her car and drives to the beach, where her fondest memories with the family took place during their childhood. Severely dehydrated and weak from starvation, Blanche admits she had been driving the car on the night of the accident, but had allowed Jane, who had been too incapacitated with drugs and alcohol to remember, to take the blame. She apologizes for never telling Jane the truth, and they are momentarily happy together. The police arrive to find Blanche unconscious and near death. As they radio for help for Blanche, Jane realizes what is happening and walks into the sea, seemingly to kill herself, but is dragged out by a police officer. At first she resists, but then she wraps her arms around him and calls him "Papa". The last shot is of Jane's smiling face as she goes willingly with the police.
Being set during the 1990s as opposed to the 1960s in the original story, the film takes a modern overtone including Baby Jane being a film actress instead of a vaudevillian, and Blanche's use of the stairlift and cassette tape. Characters Elvira Stitt the cleaning lady and Edwin Flagg are replaced with Dominick the physical therapist and Billy Korn. The film also features scenes depicting the 1990s downtown district of Hollywood.
